Published: March 12, 2010

Say you and I are friends.

And let's further assume you're fabulously wealthy.

You've come to me for advice. What would I tell you to do with your money?

I'd tell you to do three things.

The first: Buy farmland.

Sounds nuts, I know. Farming is technical, labor intensive, highly risky and remarkably capital intensive. But mark my words: Agricultural economics are going to undergo a sea change in the next 20 years.

The reason: Biofuel.

Right now, "biofuel" means corn-based ethanol. That's changing -- fast. Chemists and biologists are engineering what will amount to no less than an agricultural revolution.

They've figured out how to unlock the sugar found in all plant material and turn it into motor fuel.

That means it's now possible for the United States, long dependent on sometimes hostile and always volatile foreign powers, to grow its fuel rather than to buy it for cash. Dozens of pilot-scale projects have been built, and thousands of commercial-scale biorefineries will spring up across the nation and use plant waste -- corn cobs, rice straw, corn stalks, wood scraps and so on -- as feed stocks to create cellulosic ethanol. Federal timetables call for 16 billion gallons a year by 2022, up from 6.5 million today.

The result of this will be a massive upward revaluation of cropland that accompanies a huge uptrend in the land's ability to generate returns.

This will be Norman Borlaug (the American Nobel laureate known as the father of the Green Revolution) to the fifth power. It will also foster an urban exodus, as families return to the nation's small towns to take advantage of good wages and high quality of life. Owning farmland is a great way to play the inevitable and irreversible trend toward biofuel.

(If you're not ready to make a seven-figure commitment to a parcel of ground in, say, Lincoln County, Kansas -- where I'm from -- then you need to own shares of the biotech company that makes the enzymes that enable the biochemistry behind cellulosic ethanol. That company, Dyadic International (OTC: DYAI), has already delivered a triple-digit gain to readers of my exclusive Government-Driven Investing newsletter. I think it's just getting started!)

The second thing I'd tell you to do with your fortune: Get your hands on the hottest commodity in the world.

It ain't gold. It's not silver. It's not even uranium. It's lithium.

This lightweight metal is used in the battery in your cell phone and your laptop, in your iPod and your Kindle. Highly efficient lithium-ion technology is also what's going to deliver the energy that propels the drivetrain in battery-powered cars.

If you want to get rich, then hear my phrase and heed these words: This is the inevitable future.

Electric cars are unavoidable. A recent article in The Economist explained why: "In the next 40 years, the global fleet of passenger cars is expected to quadruple, to nearly three billion. China, which will soon overtake America as the world's biggest car market, could have as many cars on its roads in 2050 as there are on the planet today; India's fleet may have multiplied 50-fold."

The thing is, India and China have been dependent on the rest of the world forever. They're not going to be eternally hamstrung by oil sheiks or tin-pot dictators like Venezuela's Chavez or even Russia's Putin. The developing world wants green cars.

And they can have them. There's no incumbency to the gasoline-powered car in most of the world because most of the world doesn't even own cars now. But as China and India grow wealthier, that will change. The governments there (and here) will see to it that electric-vehicle technology is embraced, and huge markets for electric cars will develop. That means huge profits to be made by the smart investors who control the world's supply of lithium.

Who's that going to be? Let's ask The New York Times. In an article published Tuesday, it said: "The industry leader … is Sociedad Quimica y Minera (NYSE: SQM), a Chilean fertilizer company."

I agree. That's why I made this exact recommendation to Government-Driven Investing subscribers. Last November, in fact, five months before The Times took notice.

Third strategy for the uberwealthy: Head to the emerging world.

Don't go there for telecom, high debt yields or even consumer products, but for oil. A recent oil discovery in Uganda, for instance, could mean billions for its developer. And a handful of teeny British petroleum upstarts look like they've hit a gusher in the Falklands Basin, an offshore field that could contain billions of barrels of crude. (They've managed to shake up a diplomatic hornets' nest and now the U.S. State Department, the British Foreign Office, Argentine President Cristina Fernandez and even Hugo Chavez have entered the fray. The smart money -- that is, yours -- should bet that the Falklands will stay decidedly British and that these little oil companies will become decidedly delectable takeover targets.

As I look at these three strategies, I notice a common thread.

Government action.

Only governments can incentivize electric cars on a national level. Without tax breaks for research, subsidies for green-collar jobs and huge tax credits to early adopters, electric cars would be exorbitantly pricey and the exclusive purview of Hollywood liberals, well-heeled environmentalists and rich college kids in Berkeley and Boulder. But with the leader of the free world actively selling the Chevy Volt -- produced by a company his administration bailed out just for that purpose -- you can bet buyers will line up.

Result: Lithium booms.

Only governments can write laws that mandate the output of biofuel grow from 6.5 million gallons to 16 billion gallons. It takes the U.S. Department of Agriculture and Energy working in concert to make sure that the crops can be grown, the plants can be built and the companies have enough capital. That's what's happening now: The government is using stimulus money to provide grants and using Uncle Sam's credit to provide loan guarantees for cellulosic ethanol plants. The EPA had to adjust this year's output target down, from 100 million, but you can rest assured the government incentives will bolster output in short order.

Result: Huge returns for enzyme makers, plant builders and even seed companies. (You watch: Having made major advances in crop yields using genetics, smart companies like Monsanto Co. (NYSE: MON) will begin to introduce seeds in the next few years that also boost the sugar content of their plants. This will mean refineries can tease more ethanol from crop waste, boosting ethanol production, lowering our dependence on foreign oil and adding to the return on that section of ground you bought.)

Finally, only government action can resolve international disputes such as the diplomatic donnybrook raging in the South Atlantic over the oil in the Falklands. You can bet that Britain, which has controlled the island since 1833, will prevail and pave the way for substantial profits.

Result: Huge gains for shareholders of the companies involved.

If you're Big Rich, or aspire to be, then it only makes sense to follow Big Money. I'd suggest you always align your financial interests with the various interests these and other governments go to great lengths to support and protect.

-- Andy Obermueller
Chief Investment Strategist
Government-Driven Investing